Led by President Biden, Democrats seek to emulate the comprehensive welfare states common in Western Europe, without the high taxes Europeans routinely pay. Under the Democrat’s proposal 90% of American households would either pay less or the same taxes, according to an analysis released Tuesday by the Tax Policy Center. The richest 1% would pay all of the net new taxes levied next year.
The $3.5 Trillion (although most think it’d be more like $5 Trillion) has paid family leave, free community college tuition and an enhanced child care tax credit. Biden, Pelosi, and Schumer say it’s “free”. But we know better. Just because you buy a new car because you got a raise, it’s not free, you just assume your increased earnings (revenue) will pay for it. But, it’s an assumption because, gee maybe have a recession and you get laid off, or you decide (along with your doctor) that you’ll not get vaccinated and you get fired. It’s hardly free.
But as we move toward European-style Socialism with more and more government handouts, will we move more toward their model of who pays the bills? If we become more like Germany, for example, the typical worker pays 49% of her labor compensation in income and payroll taxes (including the employer’s contribution); in France, the proportion is 47%, in Sweden, 43%. And don’t forget they also impose a value added tax (i.e. a federal sales tax) on consumers of goods and services so in reality, those percentages are grossly low. In the U.S., it is just 30% – and half of that is Social Security and Medicare.
Is Biden and company fibbing to us when they say only those making over $400k will pay? My guess is they are as it’s not sustainable to keep offering more and more and squeezing the higher earners for more cash. As they say: it’s fine to rob Peter to pay Paul as long as Peter doesn’t get pissed off.
This is a short summary of an excellent article in the Wall Street Journal on September 30, 2021 – the full article can be read HERE